Lecture 10 (Economic) Flashcards
Capitalism & Class Struggle (Class Conflict) - Karl Marx
Main concept:
- Marx believes that the ECONOMY is SHAPED by the OWNERSHIP OF RESOURCES and CONFLICT BETWEEN CLASSES
- 2 actors in economy:
1. bourgeoisie: controlling the MEANS OF PRODUCTION (want to maximize profits as high as possible) + own the resources
2. proletariat: working-class people who sell their labor to strive for HIGHER WAGES + BETTER WORKING CONDITIONS
- Bourgeoisie’s profit goals and exploitation of workers + proletariat’s wish for HIGHER WAGES and BETTER WORKING CONDITIONS = conflict (LABOR STRIKES) > REVOLUTIONS
Social Integration - Émile Durkheim
Main concept:
- social integration: how well individuals feel CONNECTED to their society/communities
- relations to economic systems:
> when economic changes happen TOO QUICKLY, they DISRUPT SOCIAL NORMS > ANOMIE (STATE OF NORMLESSNESS/DISCONNECTION) > higher rates of suicide + SOCIAL INSTABILITY
Ex: Economic Change & Anomie
- during the shift from AGRICULTURE to INDUSTRIAL JOBS
- many people moved to cities for factory work, leaving behind rural communities
- the SUDDEN CHANGE in WORK ROUTINES + SOCIAL ROLES > people feel DISCONNECTED + UNSURE about their purpose
- LOW LEVEL OF SOCIAL INTEGRATION (lack of family ties, job stability, or community support) > MORE LIKELY TO COMMIT SUICIDE
Modern ex:
- Rapid GLOBALIZATION + AUTOMATION > caused workers in traditional industries to lose their jobs (economic disruptions) > feelings of displacement > higher rates of DEPRESSION + substance abuse in communities dependent on these industries
Culture - Weber
Main concept:
- focused on how CULTURE and BELIEF SYSTEM influenced ECONOMIC BEHAVIOR
- Developed the idea of “PROTESTANT WORK ETHIC”: Calvinists believe in that PWE, that emphasizes on DISCIPLINE, HARD WORK, and FRUGALITY as SIGNS OF GOD’S FAVOR > success in business wasn’t just about money, but also about proving one’s spiritual worth
- The mindset motivated individuals to:
1. work diligently
2. save and REINVEST their profits (instead of SPENDING WASTEFULLY)
- this CULTURAL ATTITUDE > help CAPITALISM to THRIVE
Modern example:
- Japan’s culture of DISCPLINE + HARD WORK > contributed to the country’s advance in technology industry + manufacturing > boost its economy
- Weber > societies that focus more on TRADITION/LEISURE > hard to adapt to MODERN CAPITALISM
Embeddedness - Granovetter
Main concept:
- Granovetter argued that economic actions are EMBEDDED in SOCIAL RELATIONSHIPS
- Market and Economic Behaviors don’t happen in ISOLATION, instead it is deeply INFLUENCED by TRUST, RELATIONSHIPS, AND NETWORKS
- TRUST between people can REPLACE FORMAL CONTRACTS > reduce UNCERTAINTY
Ex:
- a shop owner might better choose to work with a supplier that they’ve been working with for years even if the price is higher (TRUST AND RELIABILITY)
Social Capital - Coleman
Main concept:
- Social capital: resources and value people get from NETWORKS, RELATIONSHIPS, and SOCIAL CONNECTIONS
- Social capital COMPLEMENTS HUMAN CAPITAL (skills/education) because RELATIONSHIPS provide OPPORTUNITIES to use those human capital effectively
- SOCIAL CAPITAL can ENABLE/CONSTRAINT SUCCESS (strong social capital > greater support, guidance, or opportunities VS. low social capital > LIMIT success even for skilled individuals)
Ex:
- Workplace: employee who has connections with the managers/collegues will have better chance to excel on getting higher title compared to equally skilled employees, because they have connections to provide them with information on opportunities/promotions
Structural Holes (Insider vs. Broker) - Burt
Main concept:
- Burt argued how your POSITIONS WITHIN A NETWORK determines your access to OPPORTUNITIES & INFORMATION
- Burt distinguishes between:
1. Insiders: people who are densely CONNECTED to ONE SPECIFIC GROUP > only receive the same information all over > don’t get new insights/opportunities
2. Brokers: people who CONNECT DIFFERENT GROUPS who are not LINKED > get access to DIVERSE INFORMATIONS > ABLE TO CONNECT IDEAS ACROSS GROUPS (BRIDGES BETWEEN GROUPS)
- Brokers: gather info - share it strategically - create VALUE (COMPETITIVE ADVANTAGE)
Ex:
- CONSULTANTS AS BROKERS: a consultant who works with diverse companies, eg. banking companies and healthcare companies can use info and strategy and weaknesses/advantages in each company to complement other companies (using digital tools from banking systems to modernize hospital record-keeping)
- JOB-SEARCH case:
> relying on close friends’ info (insiders - strong ties) > less likely to hear about NEW JOB OPPORTUNITIES
> if u connect with acquaintances / people working in diff industries (weak ties) > you INCREASE your CHANCES of FINDING NEW INFO about JOBS/PROJECTS
Institutional Economics
Main concept:
- Markets are NOT SOLELY DRIVEN by PRICES & SUPPLY AND DEMAND
- Instead, it is also influenced by:
1. Formal rules: laws, taxes, and regulations
2. Informal norms: trust, cultural beliefs, social expectations
- Institutions (rules and norms) made MARKETS PREDICTABLE AND STABLE > guiding market participants behaviors
Ex: CIGARETTE TAXES AND SOCIAL NORMS
- Formal rule: gov imposed HIGH TAXES on cigarettes to REDUCE SMOKING > higher prices limit people from buying cigarette
- Informal norm: over time, social norms have changed where smoking is seen as UNHEALTHY and UNACCEPTABLE in some places > public pressure + awareness campaigns > discourage people from smoking
- COMBINED EFFECT > HIGH TAXES + SOCIAL NORMS > DISCOURAGED PEOPLE FROM SMOKING (changes in consumer behavior) > REDUCED MARKET DEMANDS
Networks and Performance (Strong & Weak Ties) - Granovetter
Main concept:
- 2 types of connections:
1. strong ties: close friends or family members > provide EMOTIONAL SUPPORT > BUT know the SAME INFORMATION as you
2. weak ties: acquaintances, friends-of-friends, far colleagues > provide DIVERSE NETWORKS > DONT KNOW THE SAME INFO AS YOU > PROVIDE YOU WITH GREATER OPPORTUNITIES (economic and career opportunities)
Ex:
- many professionals find job on platform like LINKEDIN nowadays because it provide them with distant connections in weak ties range that can give them better job/career opportunities
Status & Matthew Effect - Robert K. Merton
Main concept:
- status: a RANKING in society that INFLUENCE RESOURCES + OPPORTUNITIES
- Matthew effect: derived from bible verse Matthew 25:29 “For to everyone who has, more will be given; and he will have an abundance. But from the one who has not, even what he has will be taken away”
- It means PEOPLE or INSTITUTIONS who ALREADY HAVE HIGH STATUS/RECOGNITIONS are more likely to RECEIVE ADDITIONAL OPPORTUNITIES, RESOURCES, AND REWARDS
- high-status institutions/individuals ATTRACTS resources/recognition > further REINFORCES their STATUS
- In contrast : low-status institutions/individuals STRUGGLE to gain opportunities > keeping them in LOWER POSITIONS (the rich get richer and the poor get poorer)
Ex:
- elite universities like Harvard attracts the best professors + TOP students > keeping the ranking + quality HIGH compared to less recognized institutions
Marxian Economic Sociology
Main concept:
- Marx analyzed how CAPITALISM creates INEQUALITY and predicted its EVENTUAL COLLAPSE
- Capitalism = “forest of outstretched arms” > working-class (proletariat) GROWS and DEMANDS CHANGE due to EXPLOITATION
- Increasing inequality > class conflict > revolution (overthrow capitalism)
Ex:
- The Russian Revolution of 1917
> Workers face long working hours, poor working conditions, low wages
> Bourgeoisie controlled WEALTH + RESOURCES while proletariat SUFFERED
> Strikes/protest/Russian revolution > workers demanded NEW SOCIAL SYSTEM
Liberal Capitalism - Fukuyama
Main concept:
- Liberal capitalism: a system of FREE MARKETS + DEMOCRACY > “END POINT” OF ECONOMIC AND POLITICAL DEVELOPMENT
- After the collapse of SOVIET UNION in 1991, many countries ABANDONED COMMUNISM + ADOPTED FREE-MARKET ECONOMIES + DEMOCRATIC SYSTEMS
- Liberal capitalism: “BEST MODEL” for economic success + political freedom > led to the spread of DEMOCRACY + GLOBALIZATION in 1990s
Ex:
- After the fell of Soviet Union, Eastern European Countries (Poland, Hungary, Czechia) transitioned to:
1. Free markets: PRIVATIZING INDUSTRIES + ENCOURAGE COMPETITIONS
2. Democracy: adopting democratic political systems
- Join EU > joining the GLOBAL LIBERAL CAPITALIST SYSTEM
- China: adopted aspects of liberal capitalism (free trade + investment) while maintaining AUTHORITARIAN POLITICAL SYSTEM > challenges Fukuyama’s “end of history” idea
Institutional Evolution - Thelen
Main concept:
- Thelen studies how INSTITUTIONS EVOLVE OVER TIME based on WHO HOLDS POWER within a society
- Institutional outcomes vary based on WHO CONTROLS DECISIONS
- Diff groups (individuals, government, or workers) can influence how institutions economic policies EVOLVE
Ex:
- Apprenticeship Programs
1. Germany: shaped & controlled by central gov > STRONG WORKER PROTECTIONS + HIGHLY ORGANIZED TRAINING SYSTEMS
2. France: managed by gov > STANDARDIZED SYSTEMS but LACK FLEXIBILITY
3. UK: individuals are responsible for their training and skills dev > LESS UNIFORM STANDARD > TRAINING QUALITIES DEPENDS ON PERSONAL ACCESS TO RESOURCES
- In countries where gov control education (Finland) > well-funded + standardized = EQUAL FOR ALL
- In countries where individuals pay for education (the US) > SIGNIFICANT INEQUALITY > WEALTHIER STUDENTS CAN ACCESS BETTER SCHOOLS
